Last Updated on Apr 7, 2020 by James W
It’s true that attracting new customers is essential for growing a small business, but this doesn’t mean that you should neglect your existing customers and take their loyalty for granted. As a matter of fact, it has been established that acquiring a new customer if between 5 to 25 times more expensive than retaining an existing one. A study has found that increasing your customer retention rates by only 5% results in a 25%-95% increase in profit. The math is clear, keeping your existing customers is crucial for your business, and some very simple and yet effective strategies will help you nurture them and improve customer loyalty.
Listen carefully
Customer feedback is one of the most valuable information that you can obtain. Surveys show that 68% of customers churn because they believe that the company is indifferent towards them. In other words, customers mainly leave because they feel underappreciated and not because they didn’t like a product. By paying attention to what your customers say and complain about, you’ll save yourself a lot of time and money. Customer surveys, polls, and social media are excellent tools for feeling the pulse of your audience and gaining insight into their opinion about your company.
Instead of being angry or frustrated over negative comments and reviews, you should observe them as goldmines of information that can help you fix issues with your products or services. However, many business owners falsely perceive the fact that there aren’t any complaints as something positive, but a study has found that for every customer who complains, there are 26 unhappy customers who don’t say anything and simply churn. So, keeping the lines of communication open and encouraging your customers to express their opinions should be at the top of your priority list.
Make them feel special
Building customer loyalty is not important only in terms of a direct profit, but also because it drives referrals and recommendations. Making your customers happy is a long-term investment, as certain estimates claim that loyal customers are worth up to 10 times more than their first purchase. There’s no better way to thank your loyal customers than offering them discount coupons, deals, or free shipping. This is particularly effective right after the purchase, because many consumers struggle with buyer’s remorse, and by reaching out to them with a special offer, you’ll convince them that they have made a right decision and dispel their initial doubt. Although many business owners avoid these incentives believing that they’re too expensive, what’s even more expensive is losing your customer and reputation.
Create helpful content
Content is essential for building brand awareness and customer loyalty, but creating content just for the sake of it can only damage your marketing efforts. Provide your audience with high-quality, relevant, and valuable content that will result in driving traffic to your website and increasing conversion rates. Still, one of the biggest mistakes that you can make is constantly talking about your brand and products. Instead of that, identify the most common issues and problems that bother your audience and create helpful content that will offer them solutions and help them overcome obstacles. Great content is also shareable, so you can even expect to expand your reach and establish yourself as an expert in your industry.
Always keep your promise
Customers might forgive you for underperforming, but if you have made some flashy promises that you can’t keep they will definitely churn. That’s why it’s crucial to be realistic and not to oversell yourself. Unkept promises are a surefire way to undermine your reputation and destroy customer loyalty, which can be very costly, as 58% of customers say that they will never use the company after a negative experience. If we add that an angry customer tells 16 other people about their bad experiences, it’s clear that the bad news spreads like wildfire, and that it can set your reputation on fire.
Contribute to their success
Success is a two-way street, and if you help your customers on their way to success, you can be sure that they will return the favor. Besides being part of their success, you can also tell the world about it and score some brownie points. As you know social proof is an extremely powerful tool that can build and fortify trust and credibility. That’s why it’s important to feature your customers’ success stories on your website and social media, as they will resonate with your prospects and your company will come off as reliable and trustworthy. Still, these stories and case studies have to be authentic and genuine in order to work. It’s best to let your customers tell their own success stories in their own words and avoid the trap of focusing too much on your company.
A bird in the hand is worth two in the bush. Make sure to nurture your existing customers and always put their satisfaction before any attempts to attract and acquire new customers.
Nate Vickery is a business consultant and an online author. He is mostly focused on providing startups and small businesses with marketing and management advice. nate is also the executive editor at Bizzmark Blog.
